The News That Matters about the Nuclear Industry Fukushima Chernobyl Mayak Three Mile Island Atomic Testing Radiation Isotope

Toshiba in talks with creditor banks to receive financial support

TOKYO (Kyodo) — Toshiba Corp. is in talks with its main creditor banks in hopes it can receive financial support as the company is expected to book a huge asset impairment loss on its U.S. nuclear power business, a source close to the matter said Wednesday.

But the embattled Japanese electronics manufacturer is likely to face tough negotiations as the banks are skeptical about Toshiba management’s record that has overseen an impairment loss of up to several billion dollars, the source said.

As of the end of Sept. 30, Toshiba had shareholders’ equity of 363.2 billion yen ($3.09 billion), or just 7.5 percent of assets, far below the 30 percent required for Japanese electronics makers. The company had shareholders’ equity of around 1 trillion yen the previous year.

As the Tokyo Stock Exchange has put Toshiba shares on its watch list, the heaviest punishment besides delisting, the manufacturer effectively cannot sell its shares through a public offering to boost its capital base.

Toshiba has been focusing on nuclear energy operations as its core business but has been struggling to win orders for new power plants both at home and abroad, particularly after the 2011 Fukushima nuclear disaster. The company booked an impairment loss of about 250 billion yen in the U.S. nuclear business in the last fiscal year.

Following Toshiba’s financial turmoil, Japanese rating agency Rating and Investment Information Inc. said Wednesday it has downgraded its issuer rating by two notches to BB.

“R&I’s evaluation of Toshiba’s overall business risk was adversely affected by the materialization of the risk associated with its core nuclear power systems business, as well as by a possible serious deterioration in its financial base,” the rating agency said in a report.

Toshiba marked a group net loss for the second straight year in the fiscal year through March 2016.

December 29, 2016 - Posted by | Uncategorized

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: